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Glencore’s Zambia copper mining unit lays off 4,300 workers: company and union sources

24 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

LUSAKA (Reuters) – Glencore’s Zambian unit has laid off 4,300 workers, union and company sources said on Tuesday, as the mining and trading company deepens cuts in copper output to support flagging prices.

“The company started giving out the letters of redundancy yesterday and has continued with the exercise today,” one union official said, referring to Glencore unit Mopani Copper Mines.

The union source said around 5,000 employees working for contractors would also lose their jobs as Mopani would only maintain two contractors specialized in the sinking of shafts.

Mopani had said in a letter dated October 21 giving notice of redundancy to mine unions that the firm was still losing millions of dollars and had to take action to secure its long term viability.

Mining companies are under Zambian law required to labour unions at least one month’s notice before laying off employees.

Zambia’s President Edgar Lungu said earlier this month he would not allow Glencore’s unit to lay off workers.

Mopani was expected to pay the 4,300 workers a total of $33 million, two company sources with knowledge of the retrenchment plan told Reuters.

Swiss-based Glencore has pledged to cut its net debt to $20 billion by the end of 2016 to regain the trust of investors after its shares tumbled to record lows this year.

 

(Reporting by Chris Mfula; Editing by James Macharia)

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Congo cuts growth forecast to 7.7% as copper output falls

24 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

KINSHASA (Reuters) – Democratic Republic of Congo lowered its 2015 economic growth forecast to 7.7 percent from an earlier prediction of 8.4 percent due to weak commodity prices and lower mining output, the prime minister’s office said in a statement on Monday.

The economy of Africa’s largest copper producer grew by 9.5 percent in 2014, according to the government, which had predicted growth of 10.3 percent for 2015 in May.

But demand has been hurt by falling demand for minerals, particularly in top industrial metals consumer China. Three-month copper on the London Metal Exchange hit a fresh 6-1/2 year low on Monday at $4,444 a tonne before recovering slightly to $4,500.

Congo’s economy is heavily dependent on the export of raw minerals. Copper and cobalt exports alone accounted for 79 percent of the value of Congo’s exports in the first half of 2015, according to the Central Bank.

In another blow, Swiss-based trading house Glencore began an 18-month suspension of copper and cobalt production at its Katanga Mining unit in the country’s southeast in September.

The mine produced about 15 percent of Congo’s total copper output prior to its suspension. The country’s chamber of mines estimates that the production freeze combined with power shortages will cause output of the metal to fall from 1.03 million tonnes in 2014 to about 980,000 tonnes this year.

Prime Minister Augustin Matata Ponyo said last month that the mine’s suspension would cost the government about $215 million in tax revenues next year.

The statement from Matata Ponyo’s office on Monday promised that the government would study measures to diversify the economy, without elaborating further.

 

(Reporting By Aaron Ross; Editing by Dominic Evans)

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Egypt to procure poultry locally following industry pressure

23 November 2015 Comments (0) Business, Latest Updates from Reuters, Middle East

CAIRO (Reuters) – Egypt will stick with buying its poultry domestically, turning its back completely on international tenders and bowing to pressure from its local producers, traders said on Monday.

The ministry of supplies said it will sign a protocol on Tuesday with the Egyptian Poultry Association to supply chicken at government cooperatives, just two weeks after holding its first-ever international tender for poultry.

Earlier this month the ministry said that Egypt’s state buyer, the General Authority for Supply Commodities (GASC) would import a broader array of essential items, including poultry and meat, in order to counter rising prices.

Egypt’s urban consumer inflation jumped to 9.7 percent in October on the back of rising food prices. Earlier in the month President Abdel Fattah al-Sisi said the government would take action to counter price increases.

GASC’s decision to tender for poultry upset local industry, which then offered to match the prices offered by companies that had submitted bids in the tender, one trader said.

Egypt’s local press reported last week that an offer from a U.S. company had been accepted to supply 500 tonnes of poultry, but GASC has yet to announce details of the deal, leading many traders to believe it would be canceled.

The decision to instead procure poultry locally raises questions over whether the importing body will be able to expand its mandate without running into fierce resistance from local industries that employ thousands of workers.

The ministry of supplies declined to comment.

 

(Reporting by Eric Knecht and Maha El Dahan, editing by William Hardy)

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South Africa’s Netcare FY profit up 10%, lags consensus

23 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s second-largest private hospital firm Netcare missed estimates with a 10 percent increase in full-year profit on Monday as weaker demand in the United Kingdom offset a strong showing at home.

Netcare, which runs Britain’s largest private hospital network, BMI Healthcare, said diluted headline EPS totalled 170 cents in the year to the end of September, below a 190 cent-estimate in a Reuters poll of 10 analysts.

While demand for private healthcare is increasing in South Africa thanks to a fast-growing middle class, tentative economic growth in the United Kingdom has led to a drop in the number of Britons with private medical insurance.

Netcare said sales rose 6.1 percent to 33.7 billion rand ($2.41 billion).

 

(Reporting by Tiisetso Motsoeneng; Editing by Sunil Nair, Reuters)

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Zambia needs measures to lower deficit, restore confidence: IMF

22 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

LUSAKA (Reuters) – The implementation of measures to lower Zambia’s fiscal deficit will go a long way towards restoring market confidence, the International Monetary Fund said on Friday.

“The pressures on the economy have not only reflected the impact of external shocks but also the waning market confidence,” the IMF said in a statement.

“Fiscal discipline has been undermined by additional spending commitments that stand in contrast to lower-than-budgeted revenues.”

 

(Reporting by Chris Mfula; Writing by Stella Mapenzauswa; Editng by Joe Brock)

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South Africa’s rand on firmer footing after rate hike, stocks also gain

21 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand traded at two-week highs against the dollar on Friday, still boosted by the central bank unexpectedly raising interest rates the previous day to curb inflation pressures.

Stocks ended slightly higher, led by Mr Price as investors piled into the discount clothes retailer after a broker upgraded the stock to ‘buy’.

The rand climbed to 13.8900 per dollar during Friday’s session, its strongest since Nov. 6, and was trading at 13.9300 by 1550 GMT, up 0.7 percent on the day.

This was after the central bank raised the benchmark repo rate by 25 basis points on Thursday, warning that failure to act on inflation risks could worsen the country’s already weak growth.

Traders and analysts however warned the currency could come under renewed pressure should the U.S. Federal Reserve hike lending rates in the world’s biggest economy in December, as widely expected.

“The rand is in an interesting attempt to establish a new, bullish channel, but it is unlikely to persist through

December, as market jitters arise again in the lead up to the December FOMC (Federal Open Market Committee),” Investec analyst Annabel Bishop said.

“While it could test 13.5000/dollar, it could equally show a lightening turnaround to attempt to test the level a rand higher.”

The rand has given up nearly 17 percent of its value against the dollar this year, mainly because investors are betting on higher U.S. rates dumping emerging market assets which offer relatively higher yields but also carry more risk.

On the local bourse, the blue-chip JSE Top-40 index added 0.24 percent to 46,963 and the broader All-Share index gained by the same margin to 52,240.

Mr Price, which also reported a 16 percent increase in half-year earnings this week, jumped 8.7 percent to 200.01 rand, booking its biggest daily percentage gain in more than seven years.

Brokers at HSBC raised their rating on the stock to “buy” from “hold” and upgraded their price target to 200 rand from 195.

Other gainers included Tiger Brands, up 5.9 percent to 357 rand, a level last seen in February. Investors have welcomed news that Tiger Brands will no longer provide funding to its money-losing Nigerian unit.

On the downside, MTN Group was off 1.25 percent at 142 rand as it battles to reduce a $5.2 billion fine in Nigeria.

Overall, traders took their cue from higher overseas markets, where sentiment was helped by growing expectations of more European Central Bank stimulus.

Trade was robust with more than 328 million shares changing hands, well above last year’s daily average of 183 million shares.

The bullish tone on South African markets extended to fixed income, where the yield for paper due in 2026 reached its lowest since Nov. 4 at 8.4 percent.

It ended Friday’s session at 8.415 percent, down 4 basis points from Thursday.

 

(Reporting by Stella Mapenzauswa and Tiisetso Motsoeneng; Editing by Andrew Roche)

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Mitsubishi Motors plans Nigerian assembly plant in next year

20 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

ABUJA (Reuters) – Mitsubishi Motors Corp expects to open an assembly plant in Nigeria in the next year, joining the growing list of carmakers setting up local assembly plants in the west African nation, the Japanese group’s regional head told Reuters.

“It’s still in negotiation – you can say in the third round out of 10,” Anand Singh, the regional head in west Africa, said. “We have identified the land. Now we are waiting for some clearances from customs, finance ministry … so that’s the status.”

Analysts say the auto market in Africa’s biggest economy has huge potential.

Only a small number of new vehicles are sold annually as the market has hitherto been dominated by secondhand imports.

However, along with the threat of imposing prohibitive import duties the government has been pushing for the development of local production under a National Automotive Industry Development Plan, with the industry ministry having ordered local car distributors last year to come up with plans for new assembly plants.

It was then up to the local companies to partner with a foreign car producer, Singh told Reuters.

Earlier this week Ford Motor Co announced the opening of its new Nigerian plant, its first in Africa outside South Africa, through dealer Coscharis Motors Ltd.

Germany’s Volkswagen AG also resumed local assembly operations in July, with local partner Stallion Group, after a 20-year hiatus, while Honda announced in July the start of local production for its Accord car.

President Muhammadu Buhari, who is keen to promote a “Made in Nigeria” industrial policy, also met this week with French carmaker Peugeot’s executive vice president for Africa and the Middle-East, Jean-Christophe Quemard, to discuss the revival of local production, Buhari’s office said.

 

(Reporting by Julia Payne; Editing by Greg Mahlich. Reuters)

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Nigeria hopes to reach rice mill deal with China by year-end

20 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

ABUJA (Reuters) – Nigeria hopes to reach a deal with China within weeks to set up 40 rice mills, its new agriculture minister said, as part of plans to eliminate the need for any imports of grain within two years.

Audu Ogbeh said in his first interview since taking office last week that Africa’s top oil exporter wants to boost production of tomatoes, soy beans, nuts and plant two million cocoa trees to reduce an annual food import bill of $20 billion and create jobs for its impoverished youth.

President Muhammadu Buhari, who took office in May on a campaign to usher in a new era for a country hit by corruption and mismanagement, wants to boost the agricultural sector and end reliance on oil exports after a plunge in crude prices.

That will be an uphill challenge as pot-holed roads hamper the transport of goods. Nigeria has tens of millions of farmers but the vast majority of them work on a subsistence basis and live on less than $2 a day.

As a first step, the new government hopes to reach by year end a deal with China to import equipment to build rice mills, Ogbeh said late on Thursday.

“The federal government plans 40 mills with the Chinese spread across the country, each capable of milling 100 tonnes per day,” Ogbeh said.

He declined to give more details on the talks, which began under the previous administration led by President Jonathan. Chinese state media and a Nigerian government document obtained by Reuters have said the oil producer was talking to China’s state Import and Export Bank.

 

CHALLENGES

Ogbeh said Nigeria wanted to be self-sufficient in wheat in three years, confirming a Reuters report earlier this month citing a confidential government paper.

He said Africa’s biggest economy had a similar goal for cashew and cocoa, while the government also wanted to ramp up farming of soy beans, groundnuts, bananas and tomatoes within the next three years.

Nigeria produced 3 million tonnes of rice last year, along with 64,000 tonnes of wheat, United States Department of Agriculture (USDA) figures show.

But it still needed to import 2.3 million tonnes of rice in 2012  — a record high, according to the latest U.N. statistics which also show some 4.1 million tonnes of wheat was brought into Nigeria in the same year – nearly double the amount imported in 2000.

Ogbeh said he also had plans to improve Nigeria’s position as the world’s fourth largest cocoa producer by planting at least two million cocoa trees – in 27 of the country’s 36 states – annually for the next three years. The minister said the same number of cashew trees will be planted over that period.

To attract more young people into farming, the new government plans to retain a policy it inherited, through which farmers could receive central bank loans at a rate of 9 percent, as opposed to borrowing from commercial banks at around 18 per cent.

The prospect of little financial reward has led to the average age of a Nigerian farmer rising to around 65, said Ogbeh, since many young people find the work unappealing.

He also said he was in talks with the minister of education to allocate at least an acre of land to each of some 12,000 students at the country’s three agriculture universities during their studies to gain farming experience.

 

(By Alexis Akwagyiram and Felix Onuah. Writing by Alexis Akwagyiram; Editing by Ulf Laessing and William Hardy, Reuters)

 

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Nokia remains bullish about Africa business despite economic slowdown

20 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

CAPE TOWN (Reuters) – Finnish network equipment maker Nokia remains upbeat about its growth prospects in Africa despite a slowdown in many of the continent’s fastest-growing economies, a senior company executive said on Thursday.

Nokia, which sold its once-dominant mobile handset business to Microsoft in 2014, deals in Africa mostly with telecommunications operators and governments, both of which have been hit by weaker currencies and slower economic growth.

But a growing wave of consolidation in the sector is forcing mobile operators to step up investment to take advantage of the spectrum they gain, said Nokia Solutions and Networks head for Southern Africa Deon Geyser.

“Worldwide growth is flattish, but Africa is a pocket of growth for us,” he told Reuters in an interview on the sidelines of the AfricaCom conference.

The region Geyser manages, which stretches from South Africa to Tanzania, is heavily dependent on commodities exports, and Geyser said the fall in the oil price had “hit a few key economies and subsequently the way they invest.”

However, he said fundamental technology trends remained unchanged and the company was “bullish” about Africa.

“You still have a significant amount of voice growth, even though revenue is flat, and you still have significant growth in data,” he said.

Nokia’s dominant networks division last month reported total net sales of 2.88 billion euros ($3.09 billion) in the third quarter, down two percent from a year earlier but up five percent from the second quarter.

Out of that total, the networks division reported net sales of 298 million euros in the Middle East and Africa in the third quarter, up six percent from a year earlier and up one percent from the previous quarter.

GDP growth in oil-rich Angola is forecast to fall to below 4 percent this year from 12 percent three years ago, while Zambia is also set slow to around 4 percent on the low copper price.

But these numbers won’t derail the general trajectory of telecoms spending on the continent, Geyser said.

“The consolidation on the continent will be good for us,” he said.

Nokia has launched an offer to take over rival network gear maker Alcatel-Lucent in a deal originally valued at 15.6 billion euros.

 

(Reporting by TJ Strydom; editing by Adrian Croft, Reuters)

 

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South Africa’s rand, stocks strengthen after rate hike

19 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand hit a two-week high against the dollar on Thursday after the central bank governor raised the repo rate, while shares rose led by Gold Fields which reported a much-improved quarter.

By 1548 GMT the rand was at 14.0020 versus the greenback, up 1.16 percent from Wednesday’s close. The currency had earlier touched a session low of 14.2155 to the dollar.

The central bank lifted interest rates by 25 basis points to 6.25 percent, to curb future inflation risks.

“One thing possibly working on the rand’ s favour on a relative basis is that the SARB has been one of the more proactive central banks in EM in that it has started its hiking cycle before the Fed,” HSBC Bank senior currency strategist Dominic Bunning said.

“This may provide some breathing room for the currency relative to others whose central banks might be seen as more “behind the curve”, he said.

Government bonds however, weakened across the curve with the yield on the benchmark government bond maturing in 2026 adding 1 basis points at 8.465 percent after shedding more than 9 basis points after the rate decision.

On the stock market, the benchmark Top-40 index rose 0.83 percent to 46,851 points while the All-share index climbed 0.89 percent to 52,116 points.

Shares in Gold Fields, which also reported flat normalised earnings for the third quarter, closed 17 percent higher at 36.26 rand, after rising as much as 29 percent, when it said it expected further improvements in its South Deep mine while reviewing the future of its costly Damang operations.

“Gold production at South Deep is up quite nicely in quarter and guidance for the year is decent,” said Noah Capital Markets analyst Rene Hochreiter.

Trade was brisk with 233 million shares changing hands, compared to last year’s daily average of 187 million shares.

 

(Reporting by Nqobile Dludla and Zandi Shabalala; Editing by James Macharia)

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